A divided National Labor Relations Board (NLRB or Board), issued its Toering Electric Co. decision, on September 29, 2007, clarifying a new legal standard for determining whether an applicant for employment is entitled to statutory protection against hiring discrimination. The Board’s 3-2 ruling was a shift from its traditional approach to hiring discrimination claims. Now an applicant for employment is no longer entitled to statutory protection against discrimination based on union affi liation or activity unless the applicant is “genuinely interested” in an employment relationship with the hiring employer. In addition, in discrimination cases brought under the National Labor Relations Act (NLRA or Act), the Board imposed on the NLRB’s general counsel the “ultimate burden” of proving an applicant has a genuine interest in employment. This seminal case will likely have the impact of substantially limiting statutory protection for union “salts,” and reducing the use of salting campaigns against nonunion employers to uncover discriminatory practices. This decision also diminishes the burden on employers in refusal to hire cases and shields them from abusive tactics and the misconduct that may be part of salting campaigns.

Salting describes an organizing strategy in which a union supporter takes a job with a nonunion company and attempts to organize a union at the company. Sending union members to an employer in an effort to obtain employment and then organizing other workers is a key tactic in these campaigns. Although the Act protects certain activity involved in salting campaigns, the Board indicated that requiring the general counsel to prove an applicant’s genuine interest will prevent the use of abusive tactics and meritless litigation expenses resulting from salting campaigns targeting employers solely to provoke unfair labor practices. The Board identifi ed a distinction between economic warfare between parties to labor disputes incidental to forms of concerted activity, and a subversion of the Board’s processes by one party for the objective of infl icting economic injury on the other.

Background

The NLRA specifi cally proscribes discriminatory practices in the hiring of applicants based on union affi liation. Section 8(a)(3) makes it an unfair labor practice for an employer “by discrimination in regard to hire or tenure of employment or any term or condition of employment to encourage or discourage membership in any labor organization.” The U.S. Supreme Court extended this protection to applicants for employment in its 1941 decision in Phelps Dodge Corp. v. NLRB, fi nding that an employer can violate 8(a)(3) by refusing to hire or to consider hiring an applicant because of union considerations.

The Act specifi cally provides statutory protection from hiring discrimination to individuals who are “employees” within the meaning of Section 2(3) of the Act. Section 8(a)(3)’s proscription against discrimination with regard to hiring practices that affect applicants for employment bars job discrimination only against individuals who meet the statutory defi nition of “employee” in Section 2(3). The term “employee” is defi ned in Section 2(3) to include “any employee.” According to the Board, the lack of detail in the defi nition of the term “employee” requires the Board to interpret the term in a manner consistent with the general policies and purposes of the Act. In Toering Electric Co., the Board revisited its standards for determining job applicants who meet the statutory defi nition of “employee” in Section 2(3) and further clarifi ed its new analytical framework for approaching hiring discrimination claims.

Revised Board Guidelines for Determining Employee Status of Individual Job Applicants

Toering Electric Co., is a promanagement decision and a shift from the traditional NLRB approach to hiring discrimination claims. It protects employers from being the target of private union campaigns with the sole purpose of inflicting substantial economic injury and litigation on them by requiring that individual applicants for employment have a genuine interest in employment with the employer.

Genuinely Interested

In Toering Electric Co., 351 NLRB No. 18 (2007), the Board defi nes an applicant for employment entitled to protection as a 2(3) employee as “someone genuinely interested in seeking to establish an employment relationship with the employer.” Furthermore, the Board stated, “only those individuals genuinely interested in becoming employees can be discriminatorily denied that opportunity on the basis of their union affi liation or activity; one cannot be denied what one does not genuinely seek.”

This definition encompasses job applicants with no “genuine aspirations” to work for an employer. The Board also notes that the relationship between an employer and a job applicant who lacks a genuine interest in working for the employer is not an economic relationship protected by the Act. As such, an individual applicant who lacks an actual or anticipated economic relationship with the employer is not entitled to 2(3) “employee” protection.

Limiting the Scope of Protection for Job Applicants

The Board found that the remedial provisions of the NLRA and the real possibility of abuses of the Board’s processes were grounds for denying protection to applicants who cannot demonstrate a genuine interest in employment. The Board found that the remedial provisions of Section 10(c) of the Act, which authorizes it to remedy unfair labor practices, support its interpretation of the statute. Applied in a hiring setting, the remedial provisions of the Act suggest that only those applicants who were actually deprived of tangible employment opportunities by an employer’s discrimination suffered actual harm. Further, the Board noted that the policy against windfall and punitive damages expressed through Section 10(c) supports holding that limiting the scope of the remedy to the actual harm suffered is consistent with the purposes of the Act. An applicant who has no genuine interest in employment has suffered no actual injury if denied the position.

Additionally, in applying the genuine interest standard, the Board noted that it limits “real and unacceptable possibility of abuse of the Board’s processes in efforts to accomplish goals fundamentally inconsistent with policies and purposes of the Act.” A key factor in the Board’s analysis was the danger of an automatic presumption of an applicant’s genuine interest in employment with an employer and the accompanying statutory protection. In particular, when applied to salting campaigns aimed at litigation, there were several reasons for limiting the scope of protection for job applicants. First, the Board noted, that in the situation of batched union applications, in some cases, there is reason to doubt the submission of the applications by the union representative was authorized by the putative individual applicants. Second, there may be reason to doubt the individual applicants had a real interest in going to work for the nonunion employer. Additionally, any employer charged with 8(a)(3) hiring discrimination bears the task and expense at every stage of the proceeding in cases where the applicant never intended to work. The Board recognized, however, that union salting campaigns may involve protected activity. The key distinction is that when the aim is to provoke meritless unfair labor practice charges by submitting applications of workers with no intention of seeking work, the activity is not protected.

The General Counsel’s Burden of Proof

In Toering Electric Co., the Board’s decision shifts the focus with respect to an applicant’s genuine job interest from the employer’s proof of a motivational defense to the general counsel’s proof that an applicant is entitled to protected status as a statutory employee. The standard requires (1) an application for employment; and (2) that the application reflects a genuine interest in becoming employed by the employer. With regard to the fi rst, the general counsel must show that the individual applied for employment or that someone authorized did so on his or her behalf.

Once the general counsel has put forth the initial evidence, the employer must put at issue the genuineness of the applicant’s interest by providing evidence that creates a reasonable question about the applicant’s actual interest in going to work for the employer. The Board notes certain types of evidence the employer may introduce: the individual refusing similar employment with the respondent; an antagonistic or insulting application; or a stale or incomplete application. If the employer satisfi es this burden, it then shifts to the general counsel to rebut by a preponderance of the evidence that the individual was genuinely interested in seeking employment with the employer. Thus, the ultimate burden of proof on the Section 2(3) status of an alleged applicant rests with the general counsel.

General Observations

Was the recent decision a “rollback of protections”? Although the two dissenting justices and union advocates are decrying the recent decision and claiming that the Board continues to roll back statutory protections for union salts who seek to uncover hiring discrimination by nonunion employers and to organize their workers, the impact of the decision is probably less far reaching. Only a small number of job applicants may be affected by the decision, properly identifi ed as having no genuine interest in employment, and thereby removing their statutory protection of employee status under the Act. This may weaken a union’s ability to eliminate antiunion discrimination through means that have an adverse impact on employers. However, the decision and new framework, do, at the very least, provide unions with guidance for using legitimate salting tactics to organize workers and incent salts to refrain from engaging in misconduct during the hiring process.

In practice, a salting campaign intended in part to provoke an employer to commit an unfair labor practice and identifying a genuine interest in employment by the salt applicants are not automatically contradictory. A salt may have a genuine identifi able interest in employment with an employer, an interest in organizing workers once hired, and an interest in eliminating antiunion discrimination by the employer.

In some instances, the purpose of identifying antiunion discrimination by an employer and genuinely having an interest in employment with the same employer are complementary goals. Thus, the Board’s decision goes only so far in limiting the scope of protection for salts who apply with the sole aim of provoking an unfair labor practice on the part of an employer but have no genuine interest in employment.

Conforming hiring practices to the new NLRB precedent will not be a burdensome task for employers. As long as hiring policies and practices do not blatantly discriminate against union applicants, the decision strengthens protections for employers. Preparing for the possibility of a union-organizing campaign requires employers to assess job applicants thoroughly and be prepared to respond to hiring discrimination charges. Employers now have the ability to combat union efforts to provoke unfair labor practices through litigation-based salting campaigns by presenting “reasonable” evidence that the applicants have no real interest in employment. As a consequence of the Board’s decision, employers will now want to identify instances where batched applications or misconduct accompany salting campaigns. By identifying these instances, and preparing adequate records and evaluations for determining an applicant’s genuine interest, employers will be prepared for lawsuits in refusal to hire instances.